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Time value of money: the five money keys

How N, I/Y, PV, PMT and FV fit together, and the rule about positive and negative amounts.

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Money today is worth more than the same money later, because it can earn interest. Five numbers describe any loan or saving plan: the number of periods (N), the interest rate per year (I/Y), the starting amount (PV), the regular payment (PMT) and the ending amount (FV). Fill in four of them and the calculator finds the fifth.

Sign matters. Think of your own wallet: money that leaves you is negative, money that comes to you is positive. If you put 1,000 into an account, that is a payment out, so PV is -1,000. Later you get money back, so FV comes out positive. If you forget the minus sign, you will usually get an answer with the wrong sign or an error.

Classic Financial II

Start on the main screen: Press 2ND then CPT (QUIT) to leave a worksheet and return to the plain calculator. ON/OFF also drops back to the standard screen and clears an error.

  1. Invest 1,000 for 10 years at 5% a year, with no extra payments. Enter 10 years as N.

    10N

  2. Enter the yearly rate. The Classic Financial II starts with one payment period per year, so 5 means 5% a year.

    5I/Y

  3. Enter the money you hand over as a negative PV, and set PMT to 0.

    1000+/-PV0PMT

  4. Press CPT, then FV. It computes the money you will get back.

    CPTFV

You should seeFV= 1,628.89

If a value is wrong, just retype it into the same key. Values stay stored until you clear them with 2nd, FV (CLR TVM).

Classic Financial II key reference

RPN Financial 12

Start on the main screen: There is no menu to leave: the display always shows the X register. Press f then R/S (P/R) to leave program mode, and clear a pending prefix by pressing ON.

  1. Enter the 10 years in n and the 5% yearly rate in i.

    10n5i

  2. Type 1000 and press CHS to make it negative, then store it in PV. CHS flips the sign of the number on the display.

    1000CHSPV

  3. Set the payment to 0, then ask for FV.

    0PMTFV

You should see1,628.89

The result appears in the bottom stack line. You can clear all the money registers at once with f, then x⇄y (CLEAR FIN).

RPN Financial 12 key reference

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